Putin says power transfer needs thorough consideration

Medvedev called for a differentiated approach to decentralisation

MOSCOW, December 26 (Itar-Tass) —— Prime Minister Vladimir Putin suggested thinking it over most seriously one more time which powers should be delegated from the federal to the regional level.

“I do not rule out anything, but everything must be calculated and considered most thoroughly,” he said at a meeting of the State Council on Monday, December 26.

Medvedev called for a differentiated approach to decentralisation.

“It may be necessary to take a differentiated approach depending on the regions’ readiness to assume additional powers, and we could start with pilot projects,” the president said.

“I think we should have acknowledged long ago that Russia is such a complex country as a federation that we should not feel ashamed of taking into account these differences more thoroughly, creating differentiated legal, investment and even tax regimes in certain regions,” Medvedev said.

Earlier in the month, Medvedev met with Deputy Prime Minister Dmitry Kozak, who heads the working group on legal aspects of power redistribution, and Deputy Prime Minister Alexander Khloponin, presidential representative in the North Caucasian Federal District, head of the working group on financial aspects of decentralisation, who presented the results of their work concerning re-evaluation of inter-budgetary relations.

Medvedev noted that on the basis of this report “the final decisions will be made, including on programmes (of support to that or other regions).”

The redistribution of power from federal executive bodies to the regional and municipal authorities will spur Russia’s economic growth, Medvedev said in his annual Budget Message delivered in late June. The Budget Message is the main document that defines the state budgetary policy in 2012-2014. Its primary concerns include the proper allocation of government funds, goals for the government and the legislator to consider while preparing the budget, the decentralisation of powers between government agencies, and economic modernisation.

The Russian Finance Ministry opposed a simultaneous transfer of all functions to regions and suggested increasing their budget revenues gradually.

“We will implement the task of increasing regional budget revenues, but we will do so gradually, not to the detriment of macroeconomic stability,” Finance Minister Anton Siluanov said.

“The federal budget is responsible primarily for the overall economic situation, for the credit and monetary policy, for the situation in the financial markets and macroeconomics. And we cannot say: Let’s divide some of the revenues and will not discuss the expenditures and the macroeconomic situation,” Siluanov said.

The statement followed some governors’ call for a transfer of tax payments and revenues to regions.

“That’s not the way to do it. We will increase regional budge revenues gradually,” the minister said.

He believes that the regional authorities can be allowed to determine local tax rates. “We are ready to move in this direction,” Siluanov said.

The minister thinks that regions could also be given more rights with regard to per capita charges.

It will take 67.5 billion roubles to finance the transfer of 100 powers from the federal government to regions, Deputy Prime Minister Dmitry Kozak said.

“It has been suggested that we delegate more than 100 powers currently exercised by more than 200,000 employees,” Kozak said.

“According to preliminary estimates, this will cost 67.5 billion roubles.